Ethics Ch:8- Developing an Effective Ethics Program

values orientation

focuses on developing abstract and shared values such as accountability and commitment

responsibilities of ethics officers

assess the needs and risks of an organization wide ethics program develop and distribute a code of conduct or ethics conduct training programs for employees establish and maintain a confidential service to answer employees' questions about ethical issues ensure the company is in compliance with government regulation monitor and audit ethical conduct take action on possible violations of the company's code review and update the code

code of ethics

comprehensive set of general statements which serve as principles and as the basis for rules of conduct values: trustworthiness, respect, responsibility, fairness, caring, citizenship

mistakes with ethics program

failure to understand ethics related objectives while designing programs setting unrealistic goals senior management's failure in taking ownership of the ethics program developing ethical program material that does not help the average employee converting a country specific program into a firm's global operation

codes of conduct

formal statements that describe what an organization expects of its employees

compliance orientation

requires employees to identify with and commit to specific required conduct uses legal terms, statutes and contracts

need for ethics programs

sensitizes employees about the potential legal and ethical issues within the work environment ensures proper controls are in place to detect conflict of interest that impacts consumer well-being helps eliminate unethical employees through screening techniques promotes legal and ethical conduct by establishing, communicating and monitoring ethical values and legal requirements

statement of values

serves the general public and addresses distinct groups such as stakeholders

developing and implementing a code of ethics

consider areas of risk and state the values as well as conduct necessary to comply with laws and regulations, values are an important buffer in preventing serious misconduct identify values that specifically address current ethical issues consider values that link the organization to a stakeholder orientation, attempt to find overlaps in organizational and stakeholder values make the code understandable by providing examples that reflect values communicate the code frequently and in language that employees can understand revise the code every year with input from organizational members and stakeholders

responsibility of the corporation (to stakeholders)

corporations are viewed as moral agents that are accountable to stakeholders coverage of specific issues in the media about a firm adds to its reputation as a moral agent corporation is created in the society to perform specific social functions and is accountable to the society for its actions

ethics programs

designed to encourage ethical decision making in business have to be well designed to prevent major misconduct

effective ethics program

ensures employees understand ethical values and comply with the policies and codes of conduct helps avoid legal problems developed as an organizational control system to help predict employee behavior

systems to monitor and enforce ethical standards

external audit or review of company activities role playing exercises and questionnaires providing awareness about an internal system that allows employees to report misconduct case management services and software consistent enforcement of standards and taking necessary disciplinary action

key goals of successful ethics training programs

identify key risk areas employees will face provide experience in dealing with hypothetical or disguised ethical issues with the industry through mini-cases, online challenges, DVDs, or other experiential learning opportunities let employees know wrongdoing will never be supported in the organization and employee evaluations will take their conduct in this area into consideration let employees know they are individually accountable for their behavior align employee conduct with organizational reputation and branding provide ongoing feedback to employees about how they are handling ethical issues allow a mechanism for employees to voice their concern that is anonymous but provides answers to key questions provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve

requirements for ethics and compliance programs

standards and procedures, such as codes of ethics, that are reasonably capable of detecting and preventing misconduct high level personnel who are responsible for an ethics and compliance program no substantial discretionary authority given to individuals with a propensity for misconduct standards and procedures communicated effectively via ethics training programs systems to monitor, audit and report misconduct consistent enforcement of standards, codes and punishment continuous improvement of the ethics and compliance program

ethics training and communication

training programs educate employees about: 1. firm's policies and expectations 2. relevant laws, regulations and social standards 3. available resources and social support systems empowers employees to ask tough questions and to make sound ethical decisions initiatives should reflect the organization's size, culture, values, management style and employee base